Central Inspection Group inspecting the Supreme People’s Court (again)

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Mobilization meeting for the Central Inspection Group’s inspection of the SPC

This week the Supreme People’s Court’s (SPC’s ) media outlets are carrying this 10 September report of the Central Inspection Group (CIG) #4’s mobilization meeting to inspect the SPC’s Communist Party group.  The same group is also inspecting the Supreme People’s Procuratorate (SPP). Senior leaders (that with a bureaucratic rank of deputy bureau chief and above 副局级以上干部) of the SPC and its institutions attended in person (as well as related personnel). Those in the SPC’s six circuit courts  (巡回法庭) attended by videolink.  Zhao Fengtong is heading  (this English biography is outdated) the inspection group. He gave a speech at the mobilization meeting. President Zhou Qiang, who chaired the meeting, spoke as well. A search of Caixin’s website reveals that Zhao Fengtong has headed many such inspection groups. News of the inspection was announced on the Central Commission for Discipline Inspection (CCDI) website last week and other media outlets. The inspection is part of the current round of CIG inspections, which total 37 Party, government, and other entities.  A CIG group last inspected the SPC almost three years ago. The previous mobilization meeting and inspector results were previously mentioned on this blog.

The China Law Society (a mass (government-organized non-government organization)) and the Ministry of Justice are being inspected in this round of inspections. Each has held its own mobilization meeting.

The inspection appears to be one example of the strengthening of Party leadership in the SPC. The inspection appears to be linked to language in earlier documents to strengthen the leadership of the Communist Party (加强党的领导) and to strengthen Party political construction (党的政治建设).  The Party Center issued a document on political construction earlier this year.

The remarks that Zhao Fengtong made are consistent with the document on political construction. Some of the points that Zhao Fengtong and Zhou Qiang made are highlighted below (along with my brief comments in italics):

  • the SPC, as a central organ, assumes a major political responsibility and glorious historical mission (重大政治责任和历史使命).  This phrase is to be found in SPC policy documents supporting important government initiatives;
  • Inspections are political supervision and a comprehensive political examination of the implementation by the Party Group of a Central and national organ of its political responsibility and duties (巡视是政治监督,是对中央和国家机关党组织履行政治责任和职责使命情况的全面政治体检). The term “political inspection” appears to be used frequently since earlier this year–the report on the previous mobilization meeting did not use this term.
  • The focus is on inspecting how the SPC is implementing the Party line, direction and policies and the major decisions that the Party Center has announced (重点监督检查落实党的路线方针政策和党中央重大决策部署情况);
  • The inspection will search out political deviance (深入查找政治偏差).  This phrase is found in the document on political construction–“put efforts into discovering and correcting political deviation” (着力发现和纠正政治偏差).

President Zhou Qiang stated that the Party group fully supports the work of the inspection group, will correct the problems found, will not delay or blame.  He mentioned that the institution will combine support for the work of the inspection group with current work (要把配合做好巡视工作与抓好当前工作结合起来).  The SPC is a court, to whom the public looks for justice. Informal inquiries indicate that the SPC has an even larger civil and commercial caseload this year.  Although earlier this year it raised the minimum amount in dispute for cases that it will take, the current state of the economy means that the SPC is facing a large increase in civil/commercial disputes. Domestic cases have a six-month deadline for resolution, placing a great deal of pressure on judges to resolve them timely, either by encouraging settlement or issuing judgments (or rulings).  

As in the previous round, the CIG is inspecting the SPC for approximately two months. The inspection group has provided an email and telephone number for those wishing to provide further information.

Background on CIGs and how they operate can be found in a 2016 New York Times article (focusing on the Ministry of Public Security’s inspection) and this scholarly article by Professor Fu Hualing of the University of Hong Kong’s law faculty.

How the Supreme People’s Court guides the court system through judicial documents (1)

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collection of post 18th Party congress judicial policy documents, edited by the SPC’s General Office

I recently participated in an academic conference in which one speaker discussed Chinese judicial documents (other than judicial interpretations).  The speaker’s view was very critical of them, a view shared by a good number of academics in China. A recent law review article published in a US law journal mischaracterized at least some of these documents.  I have my own views and understanding of what these documents mean, based on many years reviewing these documents and long discussions with knowledgeable people “who cannot be named” and whose help can only be indirectly acknowledged. I have discussed SPC judicial documents in an earlier blogpost. I also discuss them in my book chapter on judicial transparency, and book chapter on the Supreme People’s Court’s (SPC) policy document on free trade zones, the Opinions on Providing Judicial Guarantee for the Building of Pilot Free Trade Zones (最高人民法院關于為自由貿易試驗區建設提供司法保障的意見 FTZ Opinion). This blogpost melds excerpts from those book chapters.

It is a fact that the Supreme People’s Court (SPC) issues a broad range of documents that guide the lower courts in addition to its judicial interpretations. The SPC creates and transmits to the lower courts new judicial policy in the form of an “opinion” (意见), which is also a type of Party/government document.  This same term is used for documents jointly issued by the SPC and institutions not authorized to issue judicial interpretations. This blogpost focuses solely on SPC policy documents.

The SPC classifies opinions as “judicial normative documents” (司法文件 or 司法规范性文件(the title of this Wechat public account) and sometimes judicial policy documents” (司法政策性文件).  As I’ve written before, this fuzzy use of terminology is not unusual. An (authoritative) follower has proposed using the English translation “judicial regulatory document” for 司法规范性文件.  An authoritative person (who cannot be named), concurred with the follower’s proposal. Those with views on the translation point should use the contact function or contact me by email.

These documents are issued with the identifier “法发” (fafa), indicating that they have been approved by the judicial committee of the SPC or one or more senior SPC leaders.  Transparency is better than before (and the SPC has issued documents encouraging greater transparency) but there is no strict publication requirement, unlike judicial interpretations.

 The FTZ Opinion is an example of how the SPC supports the Party and government by issuing documents to support important initiatives. This is a subject that I have written about on this blog before. These SPC policy documents signal an evolution of judicial policy, establish new legal rules and direct the lower courts. Lower courts implement these measures in various ways, including in their court judgments or rulings and to further implement SPC judicial policy documents.  Local courts may issue implementing guidance, as SPC policy is intended to be a framework under which local courts issue more specific measures to deal with specific local issues.

The FTZ Opinion signals evolving judicial policy to FTZ courts in a number of areas, including on civil and commercial law issues. For example, it states that courts should
support FTZ finance leasing companies and should respect the agreement of cross-border parties regarding jurisdiction and governing law. It states that a finance lease contract shall not be determined to be null and void because relevant procedures had not been performed.

The drafting of these judicial policy documents, such as the FTZ Opinion, follow a drafting process similar to judicial interpretations. The usual practice in drafting judicial interpretations is for the SPC to engage in extensive research and fieldwork, consult with related institutions within the SPC and external institutions when relevant (another academic article stuck in the production pipeline will describe the process in more detail).

The drafting team for the FTZ Opinion engaged in several years of field work, established an FTZ Research Base in Shanghai, held a Judicial Forum for the Pilot Free Trade Zones, solicited the views of experts and local courts, in the areas where FTZs are located. The SPC’s  #4 Civil Division, in charge of foreign and cross-border related civil and commercial cases and related issues, took primary responsibility for drafting the opinion. The reason that the #4 Civil Division took the lead was that much of the substantive parts of the FTZ Opinion relates to foreign trade, foreign investment, and cross-border arbitration issues. Earlier Shanghai local court guidance was incorporated into the FTZ Opinion. Once the draft was relatively advanced, it was circulated to other relevant areas of the SPC for comments. As the team of judges who led the drafting focus on cross-border civil and commercial issues, they sought comments on related issues from the Research Office, likely one of the criminal divisions and the administrative division. Consistent with general judicial practice (and SPC rules), the FTZ Opinion was not issued for public comment. The drafting of the FTZ Opinion is one small example of the quasi-administrative way in which the SPC operates.

Rules or policies included in SPC judicial policy documents may eventually be crystallized in SPC judicial interpretations and eventually codified in national law, but
that process is slow and cannot meet the needs of the lower courts. The lower courts need to deal properly (politically and legally) with outstanding legal issues pending a more permanent stabilization of legal rules.  This is true for judicial policy documents in all areas of the law, not only in commercial law.

Law-related Wechat public accounts, 2018 update (1)

Screen Shot 2018-02-03 at 10.13.48 AM Wechat, as most people with an interest in China know, has become the preferred form of social media in China.  The legal community in China has taken to it too.

For the observer, it enables us to learn about new issues (or aspects of issues) that we didn’t know existed, and (depending on the topic), hear viewpoints other than the official one, or at least read hints of dissenting views. Those with the Wechat app on their smartphone can subscribe to these public accounts but it is also possible to find some these articles through an internet search. Note that the “Mr. Yong” about whom I wrote in 2016 lurks on Wechat, so articles published may disappear, although they often reappear elsewhere.

Some are official accounts of government entities, including the courts and others are public accounts (公众账号) established by companies, law firms, universities, societies, other organizations, or individuals. In November, 2018 the Cyberspace Administration of China said that tightened management of internet content producers would be a “new norm,: and Tencent reduced the number of permitted corporate public accounts from five to two and individual accounts from two to one.  More information on this development elsewhere.

Below is the first part of a guide to some useful law-related Wechat public accounts focusing on accounts related to the Supreme People’s Court (SPC) Please contact me through the comment function or email with additional suggestions.

The official Party and government accounts enable the user to keep current on the issues and latest Party and government position in that area of law–new policy, new legislation, and new reforms, or the official response to a current hot topic.  The Central Political-Legal Commission has one, the Central Supervision Commission, as do both the SPC and Supreme People’s Procuratorate, as well as their local counterparts. Academic journals have a different audience that requires more nuance.

As I’ve written before, Party/government authorities use Wechat public accounts to reach out to a public that is moving away from traditional media to smartphones. Party/government policy is encouraging courts to do so.  There is some but not complete overlap between articles that appear on an institution’s website and Wechat account. There is complete overlap when more political matters are involved, such as the latest important speech of a leader. Even some articles published in institutional public accounts may have a “netizen” tone and use netizen slang and images.

Institution Account name
National Supervision Commission 中央纪委监委网站
Central Political-Legal Commission 中央政法长安剑 (recently renamed, read here

Official accounts linked to the SPC

 linked to SPC and its affiliated institutions
Institution Account name Content
Supreme People’s Court 最高人民法院 Official view of SPC; also republishes Xinhua articles
People’s Court Daily 人民法院报 Official view of SPC; also republishes Xinhua articles
Institute for Applied Jurisprudence

 

(since July, 2018, under the new institute director, the account has published  fewer articles than previously)

中国应用法学研究所 Had previously carried accounts of conferences and academic talks, translations of foreign materials; other articles
China Applied Jurisprudence (academic journal)(from Sept., 2018) 中国应用法学 Publishes excerpts from journal articles (recent article included: article on people’s assessors pilot project; also republishes other articles of interest to editor; translations of foreign materials, including an excerpt from “Building a Diverse Bench” (NYU Brennan Center publication)
Journal of Law Application (academic journal affiliated with National Judges College 法律适用 Publishes excerpts from journal articles, some by judges, others by academics
Alternative Dispute Resolution Reform in China 多元化纠纷解决机制 Articles on alternative dispute resolution in China and foreign experience
Database Faxin (affiliated with the People’s Court Press) 法信 Case analysis, analysis of cases on specific issues
China Trial (journal) 中国审判 Excerpts from articles in the journal
People’s Judicature 人民司法 Excerpts from articles in the journal
Case Research Institute of National Judges College 司法案例研究院 Case analysis, excerpts from its academic journal (Journal of Law Application (Cases))
SPC Information Center 智慧法院进行时 Reports on informatization of courts
Administrative enforcement and administrative trial

 

行政执法与行政审判 Articles related to administrative litigation & enforcement

 

National Judges College 国家法官学院 Official account; articles reporting on the National Judges College &    its local branches
People’s Assessors 人民陪审 Articles related to the people’s assessor system & its reforms

 

Several SPC judges and SPC officials have Wechat public accounts.  They have obtained approval to have them.   Among them are:

Individual affiliated with SPC Account name Content
He Fan (何帆), head of the planning department of the SPC’s Judicial Reform Office 法影斑斓 Judicial reform
Yu Tongzhi (于同志), judge of SPC #2 Criminal Division, editor of 刑事审判参考 说刑品案 Excerpts from the journal, articles on criminal law and criminal procedure issues (some republished), including original articles by Judge Yu himself, generally on broader criminal law issues.
Wang Dongmin (王东敏), judge of the SPC #2 Civil Division 法律之树 Issues of civil and civil procedure law

As a general (but not directed comment), if judges on the SPC express views on issues that may come before them, it would appear to raise issues similar to those that arise in the rest of the world–the propriety of extrajudicial writing–a sample of writings on this issue from other jurisdictions found here. Persons who can provide relevant information concerning relevant SPC ethics provisions, and restrictions in civil law rather than common law jurisdictions, please contact me.

What’s on the Supreme People’s Court’s judicial interpretation agenda (II)?

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SPC General office document issuing the 2018 judicial interpretation plan

The Supreme People’s Court (SPC) has a yearly plan for drafting judicial interpretations, as set out in its 2007 regulations on judicial interpretation work , analogous to the National People’s Congress (NPC) and its legislative plans. Judicial interpretations, for those new to this blog, are binding on the SPC itself and the lower courts, and fill in some of the interstices of Chinese law (further explained here).

On 10 July, the SPC’s General Office issued the document above. It sets out a list of 48 judicial interpretation projects for 2018 (with several for 2019) for which the SPC judicial committee’s had given project initiation/approval (立项) designating one or more SPC divisions/offices with primary drafting responsibility (this process to be detailed in a forthcoming article).  It appears to be the first time this type of document was publicly released (please contact me with corrections).  If so, it is a concrete step in increasing the SPC’s transparency (addressed in part in one of my forthcoming academic articles). The projects, deadlines, and some brief comments (some longer than others) follow below.

(“Project initiation”/”project approval” is a procedure well-known to those of us who have been involved in foreign investment projects in China, where it involves approval from the planning authorities, primarily for infrastructure projects, but is an initial procedure used by regulatory authorities of all types, Party and state. For the SPC, it reflects one of the planned economy aspects of the way it operates.

The document classifies the 48 projects into three categories:

  1. 2018 year-end deadline;
  2. 2019 half-year deadline;
  3. 2019 deadline.

This post will discuss the projects in the second and third categories, the ones with deadlines in 2019.

From these we can see which projects are the highest priority and where the SPC sees gaping regulatory holes need to be filled, reflecting its political-legal priorities. Often specific issues have already been on the agenda of the relevant division of the SPC for some time before they have been officially been approved by the SPC’s judicial committee.

As discussed in my previous blogpost, several of the interpretations listed for 2018 have already been issued. It is unclear which other drafts will be made public for comment, as the 2007 regulations do not require it to do so. Making this list known may put some pressure on the SPC to undertake more public consultation.  Few if any interpretations in the area of criminal or criminal procedure law have been issued for public comment.

First half of 2019 deadline

  1. Standardizing the implementation of the death penalty (规范死刑执行).  Apparently this will focus on more setting out more detailed guidelines concerning how the death penalty is implemented, linked to the Criminal Procedure Law and the SPC’s interpretations of the Criminal Procedure Law.

This article on a legal website sets out the steps in implementation and notes that parading of the persons to be executed is prohibited (although this rule seems to be ignored in too many localities).  A recent scholarly article provides some detail (in Chinese). It is possible that 2008 regulations on suspension of the death penalty will be updated. Responsibility of the #1 Criminal Division.  Given the sensitivity of issues related to the death penalty, it is significant that the SPC leadership decided to make this list public, given that this interpretation is on the list.

2. Judicial interpretation on harboring and assisting a criminal.  These provisions occur in various parts of the Criminal Law and are also mentioned in the organized crime opinion discussed in this earlier blogpost.  Drafting responsibility of the #4 Criminal Division.

3.  Interpretation relating to the protection of heroes and martyrs.  With the incorporation of the protection of heroes and martyrs in the Civil Code and the passage of the Heroes and Martyrs Protection Law earlier this year, drafting of a related judicial interpretation was expected.  Responsibility of the #1 Civil Division.

4.Interpretation on technical investigators in litigation.  Responsibility of the #3 Civil Division) (IP Division).  I look forward to Mark Cohen’s further comments on this.

5. Interpretation on the recognition and enforcement of foreign court judgments.  This blog flagged this development last year.  Judge Shen Hongyu of the # 4 Civil Division, who wrote this article on issues related to the recognition and enforcement of foreign court judgments, is likely involved in the drafting.  Drafting responsibility of the #4 Civil Division.

6. Disputes over forestry rights, apparently an area with many disputes.  The Environmental and Natural Resources Division is responsible for drafting.

7.Regulations on responsible persons of administrative authorities responding to law suits, relating to new requirements in the amended Administrative Litigation Law. and the 2018 judicial interpretation of the Administrative Litigation Law. The Administrative Division is in charge of drafting.

8.Regulations on the consolidated review of normative documents in administrative cases.  The Administrative Division is in charge of drafting this.

9. Regulations on the consolidated hearing of administrative and civil disputes, apparently related to item #22 in the previous blogpost. Responsibility of the Administrative Division.

10.  Application of the criminal law to cases involving the organization of cheating on state examinations (linked to Amendment #9 to the Criminal Law). The Research Office is responsible for drafting.

11. Application of the criminal law to crimes involving network use and aiding persons in such crimes (cyber crimes).  This article discusses some of the issues. The Research Office is responsible for drafting this.

End 2019 deadline

  1. Jointly with the Supreme People’s Procuratorate, Interpretation on Certain Issues Related to the Application of Law in Criminal Cases of Dereliction of Duty (II), likely updating interpretation (I) in light of the anti-corruption campaign and the establishment of the National Supervision Commission.
  2. Interpretation on limiting commutation during the period of the suspension of death sentences.  See related research in English and Chinese. The #5 Criminal Division is responsible for this.
  3. Interpretation on the trial of labor disputes (V), likely dealing with some of the most pressing labor law issues facing the courts that are not covered by the preceding four interpretations or relevant legislation.   The #1 Civil Division is in charge of drafting.
  4. Regulations on maritime labor service contracts, likely connected with China’s accession to the 2006 Maritime Labor Convention and a large number of disputes in the maritime courts involving maritime labor service contracts.  The #4 Civil Division is in charge of drafting.
  5. Regulations on the hearing of administrative cases, likely filling in the procedural gaps in the Administrative Litigation Law and its judicial interpretation.  The Administrative Division is responsible for drafting this.
  6.  Personal information rights disputes judicial interpretation, linked to the Civil Code being drafted.  Implications for individuals and entities, domestic and foreign. Responsibility of the Research Office.
  7.  Amending (i.e. updating) the 2001 Provisions of the Supreme People’s Court on Certain Issues Concerning Application of Urging and Supervision Procedure, relating to the enforcement of payment orders by creditors.  Responsibility of the Research Office.

 

 

 

 

What’s on the Supreme People’s Court’s judicial interpretation agenda (I)?

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SPC General office document issuing the 2018 judicial interpretation plan

The Supreme People’s Court (SPC) has a yearly plan for drafting judicial interpretations, as set out in its 2007 regulations on judicial interpretation work  (I have not been able to locate a free translation, unfortunately), analogous to the National People’s Congress (NPC) and its legislative plans.  Judicial interpretations, for those new to this blog, are binding on the SPC itself and the lower courts, and fill in some of the interstices of Chinese law (further explained here).  On 10 July, the SPC’s General Office issued the document above. It sets out a list of 48 judicial interpretation projects for 2018 (with several for 2019).  The document details the projects for which the SPC judicial committee had given project initiation/approval (立项), designating one or more SPC divisions/offices with primary drafting responsibility (this process to be detailed in a forthcoming article).  It appears to be the first time this type of document was publicly released (please contact me with corrections).  If so, it is a concrete step in increasing the SPC’s transparency (addressed in part in one of my forthcoming academic articles). The projects, deadlines, and some brief comments (some longer than others) follow below.

(“Project initiation”/”project approval” is a procedure well-known to those of us who have been involved in foreign investment projects in China, where it involves approval from the planning authorities, primarily for infrastructure projects, but is an initial procedure used by regulatory authorities of all types, Party and state. For the SPC, it reflects one of the “planned economy” aspects of the way it operates.

The document classifies the 48 projects into three categories:

  1. 2018 year-end deadline;
  2. 2019 half-year deadline;
  3. 2019 deadline.

From these we can see which projects are the highest priority and where the SPC sees gaping regulatory holes that need to be filled, reflecting its political-legal priorities. Often specific issues have already been on the agenda of the relevant division of the SPC for some time before they have been officially been approved by the SPC’s judicial committee.

Several of the listed interpretations have already been issued.  The SPC has solicited public opinion at least one of these draft interpretations, and it is unclear which other drafts will be made public for comment, as the 2007 regulations do not require it to do so. Making this list known may put some pressure on the SPC to undertake more public consultation.

This post will discuss the projects in the first category only, with a follow-up post discussing the projects in the second and third categories.

30 projects with a 2018 year-end deadline

  1. Regulations on the jurisdiction of the Shanghai Financial Court.  The NPC Standing Committee decision required the SPC to do so and included some broad brush principles on the new court’s jurisdiction.  As the SPC has announced that the court will be inaugurated at the end of August,  this is likely to be the highest priority project.  The Case Filing Division is in charge.
  2. Regulations on pre-filing property protection provisional measures (关于办理诉前财产保全案件适用法律若干问题的解释 ), a type of pre-filing injunction.  These regulations are for non-intellectual property (IP) cases, as item 18 below addresses provisional measures in IP cases (in which a great deal of interest exists in the intellectual property rights community, as these order can affect a company’s business). The Case Filing Division is in charge.  These regulations could benefit from some market input.
  3. Interpretation with the Supreme People’s Procuratorate on the Handling of Cases of Corruption and Bribery (II), likely updating the 2016 interpretation to reflect the establishment and operation of the National Supervisory Commission and addressing issues that have arisen in practice.  Issues to be covered likely include ones discussed in issued #106 of Reference to Criminal Trial (the journal of the SPC’s five criminal divisions, mentioned here) .  The #3 Criminal Division is in charge of drafting, but it is likely that the supervision commission will be/is one of the institutions providing input.  As I have mentioned earlier, the SPC generally does not solicit public opinion when drafting criminal law judicial interpretations.
  4. Judicial interpretation on the handling of criminal cases of securities and futures market manipulation.  This is linked to the government’s crackdown on abuses in the financial sector (see this report on the increase in regulatory actions) and is linked to last summer’s Financial Work Conference. The #3 Criminal Division is responsible.  It is likely the China Securities Regulatory Commission will provide input during the drafting process.
  5. Judicial interpretation on the handling of cases involving the use of non-public information for trading (Article 180 of the Criminal Law). Guiding case #61 involved  this crime.  It is likely that the principle from the guiding case will be incorporated into this judicial interpretation, as frequently occurs.  Again linked to the crackdown on the financial sector and again, it is a task for the #3 Criminal Division.
  6. Judicial interpretation on the handling of underground banking (地下钱庄) cases.  Large amounts of money are being whisked out of China unofficially.  Linked again to the crackdown on the financial sector as well efforts to slow the outflow of funds from China, and likely the People’s Bank of Chin.  Again, a task for the #3 Criminal Division.
  7. Interpretation on challenges to enforcement procedures in civil cases, related to the campaign to basically resolve enforcement difficulties within two to three years.  Drafting this is a task for the #1 Civil Division.
  8. Interpretation on evidence in civil procedure.  Important for lawyers and litigants, domestic and foreign.  Drafting this is a task for the #1 Civil Division.
  9. Interpretation on civil cases involving food safety. Food safety is an area in which public interest cases are contemplated.  These cases have been politically sensitive.  Drafting this is a task for the #1 Civil Division.
  10. Interpretation on construction contracts (II). The initial interpretation dates back to 2004. These type of disputes generally involve a chain of interlocking contracts and often regulatory and labor issues. Some of the larger cases have been heard by the SPC. Drafting this is a task for the #1 Civil Division.
  11. Interpretation on the designation of bankruptcy administrators.  Issues surrounding bankruptcy administrators have been ongoing in the bankruptcy courts, as has been discussed in earlier blogposts. Drafting this is a task for the #2 Civil Division.
  12. Regulations on the consolidating the bankruptcy of company affiliates, again an area where regulation is insufficient, posing issues for bankruptcy judges (as has been discussed in earlier blogposts). Drafting this is a task for the #2 Civil Division.
  13. Regulations on the civil and commercial cases relating to bank cards.  The drafting of this interpretation has been underway for several years, with a draft issued for public comment in June.  There have been a large number of disputes in the courts involving bank cards.  Drafting this is a task for the #2 Civil Division.
  14. Interpretation on legal provisions relating to financial asset management companies acquiring, managing, and disposing of non-performing assets.  The legal infrastructure related to non-performing assets is inadequate, as has been pointed out by all participants, including judges. The Shenzhen Intermediate Court has run several symposia bringing together leading experts from the market.  Drafting this is a task for the #2 Civil Division.
  15. Interpretation on the trial of internet finance cases (civil aspects), as existing judicial interpretations inadequately address the issues facing the lower courts. Drafting this is a task for the #2 Civil Division.
  16. Judicial interpretation on the statute of limitations in the General Provisions of the Civil Code (just issued), which was the responsibility of the #1 and #2 Civil Divisions as well as the Research Office. The General Provisions changed the length of the statute of limitations.
  17. Judicial interpretation on administrative cases involving patent authorization and confirmation. It appears to be the counterpart in the patent area of a 2017 judicial interpretation relating to trademarks.  I look forward to “brother blogger” Mark Cohen’s further comments on this. Drafting this is a task for the #3 Civil Division.
  18. As mentioned above, pre-filing injunctions in intellectual property cases (知识产权纠纷诉前行为保全案件适用法律若干问题的解释 ), a type of pre-filing injunction.  There is great deal of interest in the intellectual property rights community concerning these injunctions, as these orders can affect a company’s business. I look forward to Mark Cohen’s further comments on this. Drafting this is a task for the #3 Civil Division.
  19. Regulations on issues relating to the International Commercial Court.  Those were the responsibility of the #4 Civil Division and the interpretation was issued at the end of June.  See the previous blogpost for further comments.
  20.  Regulations on the scope of environmental and natural resources cases, with drafting responsibility placed on the Environmental and Natural Resources Division. These relate to current government efforts to improve the environment.  I would anticipate that these would include provisions on cross-regional centralized jurisdiction, so that pressure from local government will be reduced. Several provinces have already introduced such guidelines.
  21. Interpretation on compensation for harm to the environment, also with drafting responsibility placed on the Environmental and Natural Resources Division.  This is related to an end 2017 Central Committee/State Council General Office document on reforming compensation for harm to the environment. Again, Drafting responsibility with the Environmental and Natural Resources Division.
  22. Regulations on the trial of administrative agreements.  There is a tension between the administrative and civil/commercial specialists, as reflected in the area of Public Private Partnerships  (PPPs)(see this earlier blogpost).  This has practical implications for both the domestic and foreign business community, as the government is seeking to expand the use of PPPs and avoid local government abuse of them.  Drafting responsibility with the Administrative Division and the Ministry of Finance is likely to be providing input.
  23. Regulations on administrative compensation cases, drafting responsibility with the Administrative Division.
  24. Interpretation related to agency issues in retrial (再审) cases.  With the many governance problems of Chinese companies, these issues frequently arise.  Drafting responsibility with the Judicial Supervision Division.
  25. Interpretation on the enforcement of notarized debt instruments.  Lenders often use this provision to seek more efficient enforcement.  This is related to the campaign to improve enforcement as well as government policy relating to the financial sector.  This research report by one of Beijing’s intermediate court shows that asset management companies are often the creditors and the large amounts of money are involved. Drafting responsibility with the Enforcement Bureau.
  26. Interpretation relating to the enforcement of cases involving company shareholding.  Given the complexities of shareholding in China, including the frequent use of nominee arrangements, these are difficult issues for judges to deal with.  See a recent presentation by one of the circuit court judges on this issue.  Drafting responsibility with the Enforcement Bureau.
  27.  Regulations on reference pricing when disposing of property.  This too is related to the enforcement campaign as well as efforts to clean up the enforcement divisions of the local courts by requiring more transparent procedures.
  28. Interpretation on the Handling of Cases of Crimes Disturbing the Administration of Credit Cards (II), updating the SPC’s 2009 interpretation, found here. Responsibility of the Research Office, which can coordinate with criminal divisions involved as well as interested authorities such as the China Banking Regulatory Commission.
  29. Interpretation on cases involving both civil and criminal issues.  This is a longstanding issue, and with the crackdown on the private lending sector, this has come to the fore.  Among the many issues include: if the defendant is criminally prosecuted first and assets are confiscated, how can affected borrowers or other parties  be compensated.  Drafting responsibility with the research office, likely involving several civil and criminal divisions.
  30. Regulations on the implementation of the People’s Assessors Law. As the law and the follow up SPC notice are too general for courts to implement, more detailed rules are needed.  The Political Department (it handles personnel related issues) and Research Office are involved in drafting.

See the next blogpost for a discussion of interpretation in the second and third categories.

 

 

 

Comments on China’s international commercial courts

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photo from the First International Commercial Court’s opening ceremony (the grey suits are the new court summer uniforms)

At the end of June, the Supreme People’s Court (SPC) held ceremonies to mark the establishment of its international commercial tribunals (国际商事法庭)(this post will use the phrase “international commercial court,” or “CICC” as the official media are using both terms). The provisions establishing the international commercial courts went into effect on July 1. As I wrote earlier this year,  political and technical requirements shaped the CICC, as will be explained below.

These (partial) comments do not set out an overview of the court, as that has already been done by several law firms (and there are likely to be more), including Zhong Lun (published on the Kluwer Arbitration blog) and Herbert Smith Freehills.

Comments

In my view, those drafting the structure of the CICC were constrained by Chinese law, the nature of the Chinese court system and related regulatory systems. Although some Chinese commentators have referred to the CICC privately as a “mini-circuit court,” the CICC incorporates innovations, some of which have not been recognized by commentators thus far and provisions from the latest round of judicial reforms. The brief judicial interpretation establishing the CICC leaves related questions unanswered, some of which I will raise below.  I expect some of those questions to be gradually answered as regulations underpinning the CICC are issued.

The small team of judges and limited jurisdiction of the court are likely to mean that overall trends in Belt & Road dispute resolution are unlikely to be significantly affected by its establishment.  As a court focused on international commercial issues staffed by some of China’s most knowledgeable judges in that area, the court is likely to have a positive effect on the competence of the Chinese judiciary regarding international trade and investment issues, particularly as the SPC leadership knows that the international legal community is monitoring the court’s operation.  It is unclear from recent reports whether the SPC will allocate additional resources to support its operation, which to this outside observer would be a shortsighted approach to take, as even something as apparently simple as translating judgments into English (as appears to be the intention of the court) is time-consuming.

Structure of the court

From Judge Gao’s press interview earlier this year (the subject of that earlier blogpost, a full English translation of which is found on the CICC website,) it is clear that she and her other colleagues involved in drafting the judicial interpretation were well aware of international commercial courts that had been or were being established elsewhere in the world.  This research was provided by the China Institute for Applied Jurisprudence, the SPC’s in-house think tank (briefly described in this earlier blogpost).

However, the political imperatives of establishing the CICC as a priority matter meant that the SPC was constrained by the realities of current Chinese law.  Because judicial interpretations of the SPC cannot contravene the civil procedure, judges and other national law (National People’s Congress legislation) [and there appeared to be insufficient time and possibly appetite for promulgating legislation piloting exceptions to these provisions]. This meant that the language of the court could not be English, the procedural law had to be Chinese civil procedure law, and the judges had to be judges so qualified under current Chinese law.

Jurisdiction of the court

As has explained elsewhere, under Article 2 of its Provisions, the CICC has jurisdiction over five types of cases, three of which are rather flexible (cases under a higher people’s court jurisdiction that it applies to have the SPC hear; first instance international commercial cases that have a nationwide significant impact; any other international commercial cases that the SPC considers appropriate to be tried by the CICC).  This enables the CICC to control its caseload, as the eight judges on the CICC are likely to have their existing caseload in the SPC division or circuit court in which they are working, plus major obligations in drafting judicial interpretation or analogous judicial guidance.  I am personally unaware of cases in which a higher people’s court has required the SPC to hear a case within its jurisdiction (please contact me if you have such information) but it can be anticipated that a higher people’s court may prefer to rid itself of a difficult case (either legally or more likely institutionally) to avoid a mistaken decision.

Judges of the court

As has been noted elsewhere, the eight judges appointed to the CICC are all SPC judges, although Article 4 of the CICC provisions appears to permit qualified judges from the lower courts to be selected.  Those provisions do not mention whether a selection committee (one of the current judicial reforms) was used to select the current CICC judges, or whether a selection committee will be used for future appointments.  There are in fact experienced judges in some of the lower courts who are able to use English as a working language.  However, the exigencies of needing to appoint judges in a brief period of time (and possible SPC headcount restrictions, after the SPC has cut headcount under the quota judge system) meant that all CICC judges are from the SPC.  This means a number of judges are relatively junior.

Expert committee

The expert committee to be established (rules yet to be issued) is an innovation under Chinese court practice.  Unlike many other major jurisdictions, the Chinese courts lack user committees or advisory committees.  This could be a useful way of bringing international input before the Chinese courts in a formal way. although the usefulness of the institution may depend on how often the committee meets and how familiar its members are with the Chinese court system.  Presumably acting as a mediator or providing an expert opinion on a matter of foreign law will be optional (further details to be revealed when those rules are issued).  Some persons may prefer to provide general advice to the SPC rather than involve themselves in the specifics of a particular dispute.

Evidence before the court

The CICC will not require translations into Chinese of evidence, if the parties so agree, or require evidence to be notarlized and legalized. As I wrote previously,  China has not yet acceded to the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documentsso in Chinese court litigation, notarization and legalization of documents is often required., starting when a party files suit or when a foreign party responds. It is not clear whether the CICC will require notarization and legalization of foreign party authorization of counsel.  It is an innovation possible within the constraints of current law, that the CICC will consider evidence even if evidence from outside of China has not been notarized and legalized. Notarization and legalization costs time and money and a great deal of effort. It is understood that China is considering acceding to the Hague Legalization Convention.

Mediation and arbitration linking mechanism

The mechanism to link mediation, arbitration and litigation is an important part of the judicial reform measures (mentioned in this blogpost on diversified dispute resolution).  Which mediation and arbitration institutions will link to the CICC are unclear (and the rules for selecting those institutions), but the policy document underpinning the CICC refers to domestic rather than foreign or greater China institutions.  The Shenzhen Court of International Arbitration and Hong Kong Mediation Centre have entered into a cooperative arrangement to enable cross-border enforcement of mediation agreements, so presumably, this is a model that can be followed for Hong Kong.

Enforcement

The CICC provisions do not add new content on the enforcement of their judgments. As this earlier blogpost mentioned, enforcement of its own (and that of Chinese lower courts abroad) and foreign court judgments in China is on the SPC’s agenda.  As I have written (and spoken about) previously, China (with SPC participation in its delegation) has been taking an actively part in negotiations on the Hague Convention on the Recognition & Enforcement of Foreign Judgments, (the link includes the draft convention) and has signed but not yet ratified the Hague Convention on the Choice of Courts Agreements.

Borrowing beneficial ideas from abroad

It appears that the drafters of the CICC provisions considered some of the practices of Frankfurt High Court International Commercial Chamber in their draft: No translation of documents which are drafted in the English language (if there is consent); witnesses can be heard in English;and extensive use of video conferencing or other electronic means.

Some outstanding questions

  1. Will the mediation and arbitration linking mechanism be able to link with jurisdictions outside of mainland China?  Under Chinese law, preliminary measures (interim measures) such as injunctions, property or evidence preservation are not available for offshore arbitration. Will the CICC mechanism be able to change this, or will changes to current law be required, as seems more likely?
  2. Will difficult issues before the CICC be referred to the SPC’s judicial committee or other institutions within the SPC?  As I wrote about a year ago, the SPC has adopted new judicial responsibility rules, setting out guidance under which cases heard by a collegiate panel are referred to a professional judges committee or the SPC’s judicial committee.  Query whether difficult cases that have been discussed by the entire body of CICC judges will be referred further. The CICC includes several of the SPC’s most knowledgeable judges on cross-border matters (as well as the head  (chief judge) and deputy heads of the #4 Civil Division, the division focusing on cross-border/international matters).  These details are likely to be worked out over time.
  3. Will the two CICC courts have their own support staff?  Will it have its own case acceptance office?  Is the intention to give more work to existing staff, or will there be an increase in headcount to support the new institution?  The CICC judges need resources to support their work, whether it be in translation or research assistance.  If the consequence of the establishment of the CICC is to give additional work to existing personnel, it is not out of the question that someone involved may collapse from overwork.  SPC President Zhou Qiang noted in his most recent report to the NPC that there have been deaths from overwork in the lower courts. Some of the Chinese courts’ most experienced and knowledgeable judges in the area of cross-border commercial law have been appointed to the court.

Concluding Comments

The establishment of the court and its English language website gives foreign outside observers a chance to monitor how a Chinese court deals with and decides commercial cases, creating even greater pressure on the SPC and a small team of its most competent international commercial judges.

In my view, the establishment of the CICC will not affect how highly sophisticated lawyers draft dispute resolution clauses for large-scale Belt & Road projects. Many of those lawyers will still draft clauses providing for offshore arbitration because of the New York Convention (and the corresponding arrangement between Hong Kong and the mainland) and some concern about Chinese arbitration institutions.  I have personally found it is difficult to get an accurate grasp of what current practice is with Belt & Road related dispute resolution clauses, given the range of deals under the Belt & Road Initiative. It is difficult to predict how the CICC may change those practices. The CICC and its associated dispute resolution mechanism provide an alternative to existing dispute resolution mechanisms. Will it show itself to be a more attractive way to resolve international commercial disputes, efficient and cost-effective, while maintaining high quality? We will need to monitor how it develops.

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Many thanks to those who commented on earlier drafts of this blogpost.

 

Supreme People’s Court Monitor at the Supreme People’s Court

Screen Shot 2018-06-28 at 6.54.40 PMOn the afternoon of 21 June, I had the honor (and the challenge) of giving a lecture as part of a lecture series (大讲堂) sponsored by the Supreme People’s Court (SPC)’s China Institute of Applied Jurisprudence (the Institute) (mentioned in earlier blogposts, here and here).   Judge Jiang Huiling, to my right in the photo, chaired the proceedings. Professor Hou Meng of Peking University (to my left), one of China’s leading scholars of the SPC, and Huang Bin, executive editor of the Journal of Law Application  (to Judge Jiang’s right) served as commentators.

The occasional lecture series has included prominent scholars, judges, and others from  China and abroad, including  Judge Cai Xiaoxue, retired SPC administrative division judge (and visiting professor at the Peking University School of Transnational Law), Chang Yun-chien, Research Professor at Taiwan’s Academia Sinica (a New York University SJD), and Professor Zhang Taisu of Yale Law School.

As can be seen from the title slide above. I spoke [in Chinese] about how and why I research the SPC and some tentative views on judicial reform. Preparing the Powerpoint slides and presentation involved work for me that was a counterpart to that of the drafters of President Zhou Qiang’s report to the National People’s Congress (NPC),  considering what issues would be appropriate in the post-19th Party Congress New Era, and would hit the right notes with an audience of people involved with Chinese judicial reform on a daily basis.

I spoke briefly on how I became interested in China, Chinese law, and the Supreme People’s Court, as well as Harvard Law School and its East Asian Studies program (and Columbia Law School as well). I traced my interest in socialist core values back to when I was seven years old, because of the books (see a sample below) and photos my father brought back from a tour he led of American academics working in Afghanistan to the Soviet Union in the early 1960’s, and a fateful opportunity I had as a high school student to learn Chinese. I told the audience also of the meeting I had with Professor Jerome Cohen before starting law school. (In this interview with Natalie Lichtenstein, founding legal counsel of the Asian Infrastructure Investment Bank),  I discovered that Professor Cohen gave many of us the same advice–“if you study Chinese law you can do something interesting”–and how his group of former students continues to be involved with China and Chinese legal issues in many different ways. I also made comparisons between the career paths of elite legal professionals in China with those in the United States.download-1

Explaining my interest in the Supreme People’s Court, I told how a serendipitous book purchase, bicycle rides past the SPC, a group of people willing to share their insights, and a lot of hard work led to my initial interest in China’s judicial system and to my 1993 article on the SPC. I also told the story of the founding of this blog.

On judicial reform, for the most part, I summarized some of my prior blogposts. I concentrated on the first several reforms as listed in the SPC’s reform outline, particularly the circuit courts, cross-administrative region courts and other efforts to reduce judicial protectionism, the maritime courts, criminal justice related reforms, the evolving case law system, judicial interpretations and other forms of SPC guidance, and many other issues.  However, some of the issues did not make it into the Powerpoint presentation. I concluded with some thoughts about the long-term impacts within China and abroad of this round of judicial reforms.

I was fortunate to have three perceptive commentators and also needed to field some very thoughtful questions from the audience.

The event was reported in the Institute’s Wechat public account and People’s Court Daily.  Many thanks to Judge Jiang and his colleagues  at the Institute for making the event possible, and Professor Hou and Mr. Huang for taking the time and trouble to come from the far reaches of Beijing to appear on the panel (and for their comments).

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